BoJ left monetary policy unchanged as widely expected. Short-term policy rate was held at -0.1%. Purchase of JGB will continue to keep 10-year yield at around 0%, with monetary base expanding at JPY 80T per annum. Y. Harada and G. Kataoka dissented as usual in 7-2 vote.
The central bank said the economy is “likely to continue on a moderate expanding trend”. Impact of global slowdown is expected “to be limited”. Domestic demand is expected to “follow an uptrend” despite the impact of consumption tax hike. Exports are projected to “continue showing some weakness”, but are expected to be on “moderate increasing trend”. CPI is “likely to increase gradually toward 2 percent”.
